Political Economy Commons^™

Marx's Theory Of Ground-Rent: A Suggested Reformulation, Deepankar Basu

Economics Department Working Paper Series

This paper develops a simple theoretical model to analyze Marx's

theory of ground rent. Using the model, I demonstrate two important

results. First, if we take capital as exogenous, then total ground-rent

can be decomposed into the three components: differential rent of the

first variety (DRI), differential rent of the second variety (DRII), and

absolute rent (AR). Second, if we endogenize capital outlays using

profit-maximizing behaviour of capitalist farmers, then absolute rent

becomes zero. Thus, under reasonable behavioural assumptions about

landlords and capitalist farmers, there will be no absolute rent in a

capitalist economy.

Exploitation Of Labour Or Exploitation Of Commodities?, Deepankar Basu

Economics Department Working Paper Series

Attempts to use commodities to construct theories of value and use such value theory to claim that, in capitalism, commodities can be exploited, just like labour is, rest on two conceptual flaws: (a) failure to distinguish between labour and labour-power; and (b) failure to distinguish labour-power and other commodities. One way to avoid these conceptual mistakes is to use the labour theory of value.